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Germany’s Salzgitter has announced plans to acquire full ownership of steel joint venture HKM by purchasing the stakes held by co-owners Thyssenkrupp Steel Europe and Vallourec. The deal, expected to close by mid-2026, could resolve a long-standing dispute over the future of the struggling steel operation. Salzgitter currently owns 50 percent of HKM, while Thyssenkrupp Steel Europe holds 30 percent and France’s Vallourec owns the remaining 20 percent.
The agreement was revealed on Friday by the German steelmaker, marking a potential turning point for HKM, which employs approximately 3,000 staff. Under the proposed arrangement, Salzgitter would assume sole ownership from June 2026, though the financial terms of the buyout were not disclosed. The companies stated that the deal remains subject to several conditions, including a favorable assessment of HKM’s future prospects.
Implications for Thyssenkrupp Steel Europe Deal
The proposed buyout could remove a significant obstacle in Thyssenkrupp’s ongoing negotiations to sell its steel division to India’s Jindal Steel International. According to the joint statement, HKM’s uncertain future has been among the unresolved issues complicating the potential sale. The German steel industry has faced mounting pressure from cheaper international rivals and declining demand in recent years.
Thyssenkrupp Steel Europe CEO Marie Jaroni characterized the agreement as an important milestone. According to her statement, the deal represents a crucial step in setting the steel division on a more stable foundation for the future. The resolution of the HKM ownership question could provide clarity for potential buyers and stakeholders.
Supply Relationship Changes
Additionally, the agreement includes plans to end HKM’s supply ties with Thyssenkrupp Steel Europe by 2028. This termination would occur four years earlier than originally scheduled under existing arrangements. The accelerated timeline reflects the changing business relationships between Germany’s two largest steelmakers as they restructure their operations.
However, the deal faces several contingencies that must be satisfied before completion. Salzgitter has commissioned an independent assessment of HKM’s future viability, and the transaction depends on receiving positive results from that evaluation. Furthermore, Vallourec must formally agree to sell its 20 percent stake in the joint venture.
Vallourec Response to Steel Joint Venture Buyout
The French steel tubes manufacturer indicated openness to divesting its HKM stake, stating that participation in the joint venture no longer aligns with its current strategic priorities. In its official response, Vallourec described the agreement between the German steelmakers as an important step toward a potential divestment. The company said it would conduct a thorough analysis of the agreement’s terms in the coming days.
Meanwhile, the proposed acquisition reflects broader challenges facing the European steel industry. HKM has struggled alongside other steel producers as they contend with increased competition from lower-cost manufacturers and softening market demand. The joint venture’s difficulties have created uncertainty for thousands of employees and complicated strategic planning for its parent companies.
Years of Uncertainty
In contrast to the prolonged uncertainty surrounding HKM, the new agreement offers a potential path toward stability. The steel joint venture has been a source of dispute among its owners for years, with differing visions for its future operations and structure. Salzgitter’s move to consolidate ownership could provide clearer direction and enable more decisive management decisions.
The completion of Salzgitter’s assessment of HKM’s viability and Vallourec’s final decision on selling its stake are expected in the coming weeks or months. If all conditions are met, the ownership transfer would take effect by mid-2026, fundamentally reshaping the German steel landscape and potentially clearing the way for Thyssenkrupp’s strategic restructuring efforts.
